The pandemic has had a devastating impact on the local economy, and the emergence of the Omicron variant now threatens its recovery. Mayor of Tower Hamlets John Biggs and Councillor Motin Uz-Zaman, Deputy Mayor and Cabinet Member for Work, Economic Growth and Faith, have written to the Chancellor of the Exchequer this week to call on the Government to support businesses during these uncertain times.

The letter asks for the Government to consider the following measures to protect businesses:

  • Provide additional grant funding to local authorities to enable us to support the businesses most impacted by the Omicron wave and the measures put in place to address it.
  • Provide full business rate relief to hospitality, retail, and leisure businesses until 31st March 2022, to reduce costs for businesses in this challenging period.
  • Extend the VAT relief for hospitality, accommodation, and visitor attractions beyond 31st March 2022.

While Tower Hamlets Council welcomes the long overdue announcement from the Chancellor on support for businesses hit hard by the impact of the Omicron variant, a more long-term and comprehensive solution needs to take place which matches the scale of the financial challenge.

Cllr Motin Uz-Zaman, Deputy Mayor and Cabinet Member for Work, Economic Growth and Faith, said:

“Businesses in Tower Hamlets were already facing substantial economic pressure due to the impact of the pandemic, and this much-needed recovery is now at risk due to the emergence of the Omicron variant. The Government needs to step in and work with Local Authorities to protect local businesses and provide clarity on their future plans.”

Mayor of Tower Hamlets John Biggs said:

“Residents in Tower Hamlets are rightly following the Government’s advice in order to halt the spread of the Omicron variant, however the local businesses which are significantly impacted by this guidance need support in order to survive.

While the Chancellor has now finally announced much-needed support for businesses, I support Sadiq Khan’s call for the Government to go further and provide a comprehensive package of measures which provide full business rates relief, extension of the VAT relief scheme, and a substantial increase in direct grant funding to support hospitality.”

 

ENDS

 

 

Full Text of the Letter sent to the Chancellor of Exchequer

 

Dear Chancellor,

 

The coronavirus pandemic has had a devastating impact on the economy of Tower Hamlets. At it’s peak, we had 31,000 thousand residents on furlough, an increase in the Universal Credit claimant rate far exceeding the national average, and a 700 per cent increase in the number of residents seeking support from local foodbanks.

 

While Tower Hamlets’ economy, like the rest of London’s, had been recovering since restrictions were fully lifted in July, the threat from the new Omicron variant has come at the worst possible time and put this recovery at risk.

 

Retail and hospitality businesses rely significantly on trade during the festive period. We have already been contacted by many businesses in the borough which are suffering from declines in footfall and cancellations as people understandably take precautions to reduce transmission of the virus. Data from hospitality businesses in central London indicate that takings have already fallen by as much as 40 per cent.

 

The impact on business which depend on office trade is particularly severe now that government has re-issued work from home guidance. As Londoners do the right thing and work from home where they can, London Underground use has again fallen to just 50 per cent of pre-pandemic levels – this will clearly have an impact of the viability of many businesses across Tower Hamlets and London more broadly.

 

It’s entirely unreasonable for government to advise people to work from home and reduce social contacts, without providing support for businesses which rely on office workers and get-togethers over the festive period.

 

Since the start of the pandemic, government has provided range of support which ensured the survival of many businesses and protected jobs. The principle has been that businesses impacted by the need to slow the spread of the virus should also receive support from government.

 

We need to continue this approach. Businesses which are significantly impacted by people rightly following government advice deserve support in order to survive. We therefore urge you to consider the following:

  • Provide additional grant funding to local authorities to enable us to support the businesses most impacted by the Omicron wave and the measures put in place to address it.
  • Provide full business rate relief to hospitality, retail, and leisure businesses until 31st March 2022, to reduce costs for businesses in this challenging period.
  • Extend the VAT relief for hospitality, accommodation, and visitor attractions beyond 31st March 2022.

 

As the situation changing rapidly, we also ask that this support be kept under constant review. Any extension or tightening of restrictions should be matched by corresponding support for businesses and jobs.

 

Yours sincerely,

                                                                                  

Mayor John Biggs                                    

Cllr Motin Uz-Zaman, Deputy Mayor and Cabinet Member for Work, Economic Growth & Faith              

 

Notes:

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